Bone morphogenetic proteins (BMPs) regulate many processes in the embryo, including cell type specification, patterning, apoptosis, and epithelial–mesenchymal interaction. They also act in soft and hard tissues in adult life. Their signals are transduced from the plasma membrane to the nucleus through a limited number of Smad proteins. The list of Smad-interacting proteins is however growing and it is clear that these partners determine the outcome of the signal. We summarize the present status in BMP/Smad signaling, with emphasis on recently identified Smad partners and how these proteins may cooperate in the regulation of the expression of BMP target genes.